Federal Excise Tax Exemption for Gasohol

June 08, 2004


Since 1978, the excise tax for 10% gasohol fuels has included a partial exemption from the federal excise tax rate for gasoline. Extended and revised over the years, the current federal excise tax rate for 10% gasohol is 13.2 cents per gallon. This is a 5.2 cents per gallon exemption from the 18.4 cents per gallon tax rate for gasoline. The 5.2 cents per gallon amount will continue through December 31, 2004. The amount will drop to 5.1 cents per gallon for the period of 2005 - 2007. These schedule amounts were included in the Transportation Efficiency Act of the 21st Century (TEA 21), enacted in June 1998. TEA 21 expires on December 31, 2007. In addition to 10% gasohol, lower excise tax rates are provided for two other gas/alcohol mixtures. 7.7% gasohol has an excise tax rate of 14.4 cents per gallon and 5.7% gasohol has an excise tax rate of 15.4 cents per gallon. Taxes are filed quarterly. Publication 510, Excise Taxes for 2003, describes the three types of gasohol. The excise tax rates themselves are included in the Instructions for Form 720. The IRS general web site listed below under "Contact" provides a "Forms and Publications Finder." Enter the form or publication name or number that you are interested in, and click on "GO" to receive the requested form or publication.

Program Overview

Implementing Sector: Federal
Category: Financial Incentive
State: Federal
Incentive Type: Corporate Tax Exemption
Web Site: http://www.fhwa.dot.gov/tea21/factsheets/htf.htm
Administrator: U.S. Department of Transportation
Start Date:
Eligible Renewable/Other Technologies:
Incentive Amount: 5.2 cents/gallon exemption for 2003-2004 for 10% Gasohol; Less of an exemption for 7.7% and 5.7% gasohol and for the 2005-2007 period.


Name: Public Information - DOT
Organization: U.S. Department of Transportation
Address: 400 7th Street, S.W
Washington DC 20590
Phone: (202) 366-4000
Email: dot.comments@ost.dot.gov
Name: Public Information - IRS
Organization: U.S. Internal Revenue Service
Address: 1111 Constitution Avenue, N.W.
Washington DC 20224
Phone: (800) 829-1040

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.